Tubos Reunidos S A : 2021 - Annual Report

Dear shareholder,

As expected, financial year 2021 was an even tougher year than 2020, due to market inertia and the impact that inertia had on timing for our business. Abrupt and vertiginous increases in energy, scrap metal, ferro-alloys and transport prices as well as high inflation posed a major challenge in 2021. All of this combined with the pandemic and the international health crisis unleashed by COVID- 19, which was present throughout the year, impeded the recovery of market activity. However, when we thought we had hit rock bottom and were headed for some degree of normalcy, it was the start of 2022, a bleak and devastating time for the people of Ukraine. Once again, truth proved stranger than fiction, and we witnessed live the Russian attack on democracy and the rights of an entire country, right here in Europe.

Although headway in vaccination and the collective effort made by society has allowed for certain countries to reopen as travel restrictions have been eased - though normalcy in Asian countries and particularly China is still a long way away - this reopening was cut short by the geopolitical impact of the Russian invasion of Ukraine on the markets. This is especially true in the energy market, which saw energy and raw material costs skyrocket on top of the rising costs already seen in the last few months of 2021.

Executive Chairman

FRANCISCO IRAZUSTA RODRÍGUEZ

2021 FINANCIAL YEAR

Fortunately, 2021 was not only impacted by the pandemic and increased costs. We are proud to celebrate the Group's recognition as a strategic company. On behalf of the Board of Directors I would like to thank our customers, institutions, international analysts, and financial institutions for their trust and support as well as our entire team for their efforts, which made it possible for us to receive a 112.8 million euro participation loan from the Business Solvency Financial Support Fund managed by SEPI (State Company for Industrial Participations) and, at the same time, a novation and improvement of pre-existing financing conditions, both of which are undoubtedly key to our viability and the achievement of our objectives in coming financial years.

With this confidence and renewed financial solidity, we are optimistically taking on the new 2021-2026 Strategic Plan, which will allow us to continue transforming the Group, equipping our installations with the latest technology and seeking to add value and improve the Group and the Company in the medium and long term. We are firmly committed to the energy transition and decarbonisation with development and efficient manufacturing of innovative and sustainable piping solutions. This new

Strategic Plan will help us take on new markets and sectors, especially those involving clean energy and hydro, thus helping our customers to successfully overcome their future challenges. This year, I'd like to say that, thanks to our people's effort and commitment, we've reached our first clean energy milestones. We hope this is just the beginning and that there are many more to come.

CORPORATE GOVERNANCE

Our commitment to sustainability is not just aspirational; it is a roadmap for responsible growth, which must go hand in hand with good corporate governance, based on proper and transparent management.

In 2021, we used our philosophy of continuous improvement to create a Corporate Governance Refresher Plan, which was implemented over the course of the year and will continue with major advances in 2022. All of these improvements and the adoption of best practices will help us to optimise the governance structure, in line with the company's strategy, which will create value, help us achieve our goals and boost our investors' trust in us.

The Board of Directors made notable efforts in terms of good governance in 2021. For instance, it prepared a new set of Rules of Procedure pursuant to the amendments to the Capital Companies Act (LSC) made in Law 5/2021 and the recommendations of the 2020 Good Governance Code for Listed Companies (CBG), which includes sustainability and a special emphasis on issues of compliance, diversity and the regulation of conflicts of interest. It also approved seven new corporate policies: General Corporate Governance Policy, Directors' Remuneration Policy, Risk Management and Control Policy, Environmental, Social, and Governance Sustainability Policy, Corporate Tax Policy, Criminal Risk Compliance and Prevention Policy, and Gifts and Entertainment Policy.

It is my pleasure to highlight some other important corporate governance milestones reached in 2021: The first assessment of the operations of the Board of Directors with the help of an external consultant; an in-depth review by the Board of Directors of its Compliance model, which led to the approval of a new Code of Ethics, among other internal regulations, and an external certificate of suitability for the design of our Compliance System; the analysis and modification of the composition of the company's Oversight Committees, and the notable increase in independent directors as well as women on the Board of

Directors, who now represent 36.36% of the board with the inclusion of two new women as independent directors, Teresa Quirós and María Sicilia, leading the company to be added to IBEX® Gender Equality index on 20 June 2022.

The Board of Directors is firmly committed to continuing to advance in terms of corporate governance in 2022 with new policies and internal regulations. A key milestone in this regard is submitting the amendment of the Bylaws and the Shareholders' Meeting Regulations for approval by the Shareholders to adapt to the recent amendment of the LSC and CBD recommendations.

In June 2021, Juan María Román Gonçalves ceased to hold the position of Chairman and President of the Audit Committee as the term of his appointment ended. I would like to thank him here for his significant contributions to the company's mission during his four years as independent director and for his commitment to the Company in tough times.

STRATEGIC PLAN

We continue to follow our Strategic Plan based on the energy transition and decarbonisation, which will allow the Company to take on new markets and business sectors with special focus on clean energy and hydrogen. This plan is based on three clear objectives: Once again generate net positive results in a manner that is sustainable over time, care for our people and care for our customers. As was previously announced, we began unifying our steel production processes with the creation of the Group's new steel mill in Amurrio. After a referendum on the matter, we agreed to and signed the conditions to move the staff of the Sestao mill to the Amurrio mill. We also negotiated and reached an agreement on the voluntary early retirement of anyone born between 1958 and 1961 and we signed collective bargaining agreements in both Amurrio (2017- 2021) and Trápaga (2018-2021), standardising the labour relations at the heart of Tubos Reunidos Group. We are in the second year of implementing the Safety Excellence Plan, and we launched our Digitisation Plan to improve process efficiency and become more agile and flexible, two essential traits in an environment as volatile as ours.

BUSINESS OUTLOOK

We began the year with much more business than we had at the start of 2021, but it was also accompanied by unprecedented price volatility. We chose to maintain a small